The federal government is considering new tax measures targeting Pakistan’s fast-growing e-commerce sector in the upcoming 2025–26 budget, aiming to boost revenue and meet IMF deficit targets.
According to officials, the Federal Board of Revenue (FBR) is evaluating options to impose general sales tax (GST) on online purchases. One proposal suggests a 3% tax deduction by the delivery service on cash-on-delivery orders, while the remaining 15% GST would be charged by manufacturers and included in product pricing.
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Talks with the International Monetary Fund (IMF) begin Wednesday to finalize budget measures, including curbing spending and increasing tax revenue to meet a budget deficit ceiling of 5.1% of GDP.
Despite repeated efforts, Pakistan has failed to bring millions of traditional retailers into the tax net. Authorities now see online shopping—especially popular among middle and upper-income urban consumers—as a viable area to expand tax collection.
The FBR is also exploring taxation on local debit/credit card purchases, as international transactions already incur federal excise duty (FED).
A recent FBR study found significant untapped tax potential in e-commerce. However, tax experts warn that aggressive taxation could discourage growth in this still-developing sector.
Still, officials argue that delaying taxation could make future enforcement more difficult. Proposed tax law changes would require all online platforms, even those not holding inventory, to collect and deposit sales tax on behalf of the government.
